The Cultural Economy Moment?

Professor Terry Flew, Media and Communications,

Creative Industries Faculty, Queensland University of
Technology

Keynote Presentation to Media Technologies,

Community and Everyday Life, symposium hosted by
the Centre for Everyday Life, Murdoch University,
Perth, WA, 2 September 2009

My presentation today will focus upon the rise of the term “cultural
economy” in the 2000s, and some matters arising about the
relationship between both “culture” and “economy” as fields of
research and study, and cultural studies and economics as academic
disciplines that seek to understand and intervene in these fields. When
I refer here to cultural studies, I am not seeking to engage in the long
process of defining what cultural studies is (or is not), nor am I seeking
to sharply differentiate cultural studies from media studies or
communication studies. Rather, taking a broad definition of the field, I
will argue that it has been constituted at least in part by an opposition
to how it understands economics as a discipline to be constituted. This
is seen most clearly in the current context in the way in which “neo-
liberalism” is invoked as a term to signify what thinking in terms of
economic discourse entails, as well as a critique of its deleterious
effects when applied to the field of public policy. One of the points I
want to make is that economics as a discipline is in fact far more
porous and pluralist than this one-dimensional interpretation of it
would suggest, and this emerges in interesting ways when there is
consideration of those parts of economics as a discipline that may bear
upon an understanding of culture. In keeping with the theme of today’s
symposium, I will draw upon examples relating to digital media
technologies and their everyday uses by people and communities
where possible.
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The Rise of Cultural Economy: Intellectual Precursors

Although the term “cultural economy” dies not gain widespread

currency until the 2000s, there is considerable work undertaken since
the 1970s that invokes a relationship between culture and economy.
Herbert Schiller’s pioneering critique of international communications
posited a relationship – which Schiller’s work adhered to over a 30 year
period – between the rise of the media entertainment and information-
based industries (what he termed the Entertainment-Communication-
Information (ECI) Complex) to the centre of the United States economy,
and the extension of global media and communication industries,
systems and ideologies as an instrument of cultural domination on
non-Western societies and cultures. While the resulting “cultural
imperialism” thesis has been widely critiqued, it retains considerable
influence worldwide as seen, for example, in the statement of the
World Commission on the Social Dimension of Globalization in 2004:
“The fear is that constant exposure to the images of Western lifestyles
and role models could lead to tensions which would be both culturally
and socially divisive” (World Commission on the Social Dimension of
Globalization, 2004: para. 222).

There is also the small sub-branch of economic known as cultural

economics. Cultural economics has operated to some extent at the
margins of economic theory, largely unable to challenge the utilitarian
assumptions of mainstream neo-classical economics nor able to build
bridges to the arts and humanities, so it has frequently operated as an
applied sub-discipline concerned with assessing the impact of public
subsidy to the arts and cultural activities. It is interesting to consider
how it seeks to clarify what distinguishes the cultural domain from
other areas in terms of its goods and services, its criteria of value, and
its delineation of industries and markets. In his overview of this filed,
Throsby (2000: 4) proposes a definition of cultural activities as being
those:

• involving some form of creativity in their production;

• concerned with the generation and communication of symbolic meaning; and

• whose output embodies, at least potentially, some form of intellectual property.

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One notable feature of the cultural economics literature is that it is far

less anxious bout whether the resulting industries are labeled cultural
or creative industries than is the case in cultural studies and related
fields. This is because industry analysis is, from the point of view of
economics, is ‘simply a convenient box of tools for representing and
analyzing the way in which the processes of production, consumption
and exchange occur for given commodities’ (Throsby, 2000: 111). At
the same time, in his recent overview of the variety of competing
models of what the cultural or creative industries are, Throsby has
observed that one consequence of talking up the economic
significance of cultural or creative industries has been to shift cultural
policy thinking so that it is ‘rescued from its primordial past and
catapulted to the forefront of the modern forward-looking policy
agenda, an essential component in any respectable economic policy-
maker’s development strategy’. This is because ‘the arts can [now] be
seen as part of a wider and more dynamic sphere of economic activity,
with links through to the information and knowledge economies,
fostering creativity, embracing new technologies and feeding
innovation’ (Throsby, 2008: 229).

A third and less obvious inspiration for cultural economy discourse was
postmodernism, particularly as it was developed in the early work of
Jean Baudrillard (Poster, 1994). Baudrillard argued that a feature of
contemporary capitalism was that the distinction between use-value
and exchange value that Marx saw as defining the nature of the
commodity form was less and less relevant to consumer society where
both were subsumed under the more general category of sign-value.
Rather than moralizing against the inauthentic nature of, say,
entertainment at a theme park as a poor substitute for “real” culture or
entertainment, Baudrillard instead proposed the “negative strategy” of
celebrating the theme park as a simulacrum of the real, or the hyper-
real of postmodern culture. While the impulse to link Baudrillard to
political economy was one that in practice not many followed, a
notable series of contributions that draw upon Baudrillard’s insight
have been made by Scott Lash and John Urry (Lash and Urry, 1989;
Lash and Urry, 1994; see also Lash, 2004). For Lash and Urry,
Baudrillard’swork hints at a series of developments - the semiotisation
of everyday life, reflexive accumulation, niche consumption leading
flexible production – whereby it is not the case that culture is being
increasingly industrialized, but rather that the whole economy is being
increasingly culturalized:
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Even in the heyday of Fordism, the culture industries were irretrievably more

innovation intensive, more design intensive than other industries … Our claim is

that ordinary manufacturing industry is becoming more and more like the

production of culture. It is not that commodity manufacture provides the template,

and culture follows, but that the culture industries themselves have provided the

template (Lash and Urry, 1994: 123).

More obviously connected to contemporary theories of cultural

economy are those works that developed the sociology of culture in
the 1970s and 1980s. Pierre Bourdieu’s work is highly significant here,
particularly Distinction (Bourdieu, 1984). In positing a relationship
between cultural consumption and the reproduction of social class
relations, and in proposing that this occurred at least in part through
the denial of “material” concepts such as that of class being relevant
to the domains of art and culture, Bourdieu established a relationship
between the distribution of economic capital and that of cultural
capital which places socio-economic relations at the heart of
considerations of culture. In championing Bourdieu’s work as a
contribution to the sociology of culture, Raymond Williams and
Nicholas Garnham observed:

The cultural field serves as a marker and thus a reinforcer of class relations for

two reasons. First, because a field occupied by objects and practices with minimal

use-value, is a field in which par excellence the struggle is governed by a pure

logic of difference or distinction, a pure logic of positionality. Secondly, because

the creation of art as a special social object and practice, defined by its difference

and distance from everyday material reality and indeed its superiority to it,

objectively depends upon the distance from economic necessity provided by the

possession of economic capital (Garnham and Williams, 1986: 124).

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Finally, there is the work of Nicholas Garnham, whose contribution has been central to

British traditions of thinking about cultural economy, but whose work has led in two

quite distinct and possibly contradictory directions. In general, Garnham’s approach to

the political economy of media and culture has been one that insists that the development

of capitalism has involved the “industrialization of culture”, so that it does not make

sense to think in terms of culture as superstructural forms (as in theories of ideology, for

example), but to instead consider the dynamics of cultural industries in terms of the

general forms and practices of capitalist commodity production. This in turn shaped

Garnham’s famous critique of what he termed the “left-pessimist” approach to cultural

policy, with its focus upon residual cultural practices and the state-subsidised arts, and

influence that such work would have upon later developments in British cultural policy

and the development of creative industries (O’Connor, 2007). Garnham called for a shift

in progressive cultural policy thinking towards the commercial cultural industries,

arguing that:

Most people’s cultural needs and aspirations are being, for better or worse,

supplied by the market as goods and services. If one turns one’s back on an

analysis of that dominant cultural process, one cannot understand either the

culture of our time or the challenges and opportunities which that dominant

culture offers to public policy makers (Garnham, 1990: 155).

At the same time, while Garnham was highly critical of non-market

allocations of cultural resources which create dependency relations
between cultural workers and cultural bureaucrats, and was applying
techniques of conventional economic analysis to the British television
industry (Collins et. al., 1987), he was also drawing upon Jurgen
Habermas’s theory of the public sphere to establish a different way of
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dichotomizing the market and non-market sectors of cultural

production. This was seen in his normative distinction between public
service broadcasting – the BBC in the British case - and commercial
media, on the basis of the former addressing the community as
citizens, and the latter dealing with the audience as consumers. While
Collins (2004) and Jacka (2004) have argued that this normative
account of public service broadcasting has in practice provided a poor
guide to what public broadcasters have done in practice, it nonetheless
instituted a distinction between the citizen and the consumer, and the
argument that addressing media audiences as consumers was
somehow impoverished in comparison to addressing them as citizens,
that developed a tenacious foothold in media policy debates over the
1990s and 2000s (Flew, 2006).

Contemporary Theories of Cultural Economy

There exist a range of antecedent approaches that point towards the

rise of cultural economy as a concept in cultural studies and related
fields. I now want to consider five ways in which the concept has been
developed in the 2000s. The best known of these in Australia would be
though the concept of the creative industries, which has been the
subject of ongoing debate since the Queensland University of
Technology established a Creative Industries Faculty in 2001, and the
association of high profile cultural researchers such as John Hartley and
Stuart Cunningham with the Australian Research Council’s Centre of
Excellence for Creative Industries and Innovation (Hartley, 2005; Flew,
2008: 168-192). Creative industries has also been associated with a
range of policy initiatives worldwide, ranging from the creative
industries mapping documents of Britain’s Department of Culture,
Media and Sport in the late 1990s (DCMS, 1998), to the analyses
developed through the United Nations Commission for Trade, Aid and
Development (UNCTAD) and others on the opportunities presented by
creative economy strategies for developing countries (UNCTAD, 2008;
Barrowclough and Kozul-Wright, 2008; Cunningham, 2008).

But its important to be aware that the concept of cultural economy has
been in operation often when it has not been named as such. One of
the best accounts of such developments worldwide is found in George
Yúdice’s The Expediency of Culture (Yúdice, 2003). Yúdice develops the
concept of culture as resource, arguing that in early 21st century global
capitalism ‘culture is increasingly wielded as a resource for both socio-
political and economic amelioration, that is, for increased political
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participation in an era of waning political involvement, conflicts over

citizenship, and the rise of … “cultural capitalism”’ (Yúdice, 2003: 9).
This involves culture being increasingly viewed as a social resource,
performing a variety of functions, ranging from redressing social
marginalisation to promoting community behaviour more conducive to
economic growth, from public investment in festivals and events that
promote local tourism to energising otherwise dormant well-springs of
creative energy, and with such demands impacting upon the conduct
of contemporary cultural institutions at all levels. Manifestations of
culture as a resource can be seen with:

• the need to develop economic rationales for arts and cultural funding;

• the growing recognition of social capital as a factor in economic development;

• the rise of the creative industries based upon wealth generation through new ideas

and intangible assets;

• the uses of culture in urban promotional strategies; and

• growing demands on the part of minority groups for cultural rights and

recognition of cultural citizenship.

The growing interest on the part of governments and other institutional

actors to deploy culture as a resource has coincided with a growing
interest in the business literature in culture as a variable in economic
performance. New management literature makes much of the need to
diagnose the culture of organizations in order to shift the relationship
between artifacts, values and “deep cultures” to initiate and manage
change (Clegg et. al., 2005), while to work on competitive strategy
associated with Michael Porter implicitly draws upon cultural variables
in the rise of economically successful regional clusters (Porter, 2000).
This work has been picked up on by social scientists in Britain
associated with the Journal of Cultural Economy, which describes its
aim as being to understand ‘the role played by various forms of
material cultural practice in the organisation of the economy and the
social, and of the relations between them’ (Journal of Cultural
Economy, Aims & Scope). In their founding text on cultural economy,
du Gay and Pryke (2002) associated a growing ‘culturalization of the
economy’ with such factors as:
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1. Arguments that the management of culture has become the key to improving

organizational performance, particularly when there is an alignment between

organizational goals and the values and attitudes if those working within them;

2. The rise of the service sector, where the relationship between economic

transactions and their performative or cultural dimension through interpersonal

relations and communicative practices are more overt and visible;

3. The rise of the cultural or creative industries, and the spread of practices

throughout the economy that have their genesis in these industries, such as a

premium being placed upon design, the role of cultural intermediaries in

channeling consumer demand, and the role played by networks in time-based and

project-based production activities.

A question raised by this work is whether, as Don Slater has observed,

we are conflating a greater conceptual awareness of the need to think
about culture and economy in tandem rather than separately, with a
different empirical claim that cultural factors have become more
important in contemporary capitalist economies:

There is the constant danger of confusing new movements within thought (the

new understanding that culture and economy cannot be theorized separately) from

new empirical developments. Is it the case that culture is actually more central to

economic process than it was before? We need to develop more adequate theories

of the sociology of economic life rather than proclaim epochal social revolutions

that are merely the artefact of the inadequate theories and theoretical division of

labour we have inherited (Slater, 2002: 76).

Amin and Thrift has historicized the concept of cultural economy,

noting significant contributions going back to Adam Smith, Karl Marx
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and ThorsteinVeblen. They argue that ‘The production, distribution and

accumulation of resources – loosely the pursuit of prosperity – has
always been a cultural performance … [but] with the rise of a separate
profession of economics and a set of specifically economic knowledges,
such performance has either been neglected or actively denigrated
(Amin and Thrift, 2004: xii). They trace three stages in cultural
economy debates. The first, associated with neo-Marxists such as
Sayer (1997) proposes that while the cultural and the economy
increasingly intersect, they need to remain analytically separate
realms, based around the distinction between the interpretative and
the instrumental, or, put differently, between abstract and calculable
regimes of value. Second, there is the “synthetic” model associated
with authors such as du Gay and Pryke, where culture and economy
are increasingly overlapping realms, with each transforming the other
as they become more intertwined. The third approach, which they
associate with actor-network theory, questions this way of ordering the
debate, noting that all of the key categories of economic theory –
markets, industries, goods and services – are formed through
processes that are simultaneously cultural and economic, as well as
being shaped by law, politics, regulations and science. To give one
example of how this works in practice, Callon et. al. (2004) have
argued that one of the features of what is sometimes referred to as the
“new economy” is that consumers are themselves increasingly invited
to participate in the processes through which one type of product is
differentiated from a seemingly similar one on the basis of its
perceived “qualities”, but that the qualities do not exist independently
of the judgments made by multiple agents, including consumers as
well as producers, advertisers, marketers, regulators etc. 1

Many of these debates have played themselves out very actively in

geography, particularly in the emergent field of cultural economic
geography. Economic geography as a discipline has experienced two
major turns since the 1970s: the ‘Marxist turn’ of the 1970s which
rejected positivism and sought to reconstruct the discipline as being
about an understanding of spatial relations under capitalism (Harvey,
1982; Swyndegouw, 2003); and the ‘cultural turn’ of the 1990s, where
post-structuralist critiques of representation were brought to bear upon
the field (Barnes, 2000; Gibson-Graham, 2003). James et. al. (2008)
provide a very useful map of these developments, noting that I makes
sense to distinguish five related but somewhat distinct factors in the
rise of cultural economic geography:

1. The relationship between structuralist accounts of the spatial dimensions of global

capitalism and post-structuralist challenges to what is perceived to be an implicit

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hierarchy of thought by which particular conceptions of ‘the economy’ are

prioritized (e.g. is ‘labour’ as a spatially grounded practice more ‘real’ in its

material effects than discourses surrounding ‘labour markets’?);

2. Particular ways in which culture and economy interlock, such as the relationship

between markets and production as spatially grounded economic practices and the

lived experience of people within such economic spaces;

3. The cultural constitution of economic practice, and the awareness that ‘cultural’

factors can mark significant sources of regional differentiation, local

entrepreneurship and competitive advantage in globalized economies, as seen in

the debates surrounding clusters and learning regions (e.g. Cooke and Lazzeretti,

2008);

4. Uses of actor-network theory to analyse the performative dimensions of “soft

capitalism” and the ways in which it is engaged in new business management

practices (Thrift, 1999, 2002);

5. Debates surrounding the geographical location of cultural/creative industries, and

their propensity for clustering (Scott, 2008), as well as the question of whether the

provision of cultural and lifestyle amenities for the “creative class” generates

innovation and entrepreneurship in these industries (Florida, 2008).

Finally, I want to consider the contribution of creative industries

debates, but in a particular way. In much of the extended commentary
on creative industries, there has been a focus on the claims made
about the creative side, and whether it is legitimate to claim creativity
as a sui generis category that can provide a basis for distinguishing
some industries and activities from others (Donald, 2004; Schlesinger,
2008), and whether the analytical coherence and critical edge
associated with the term ‘cultural industries’ is lost when the concept
is broadened to include sectors such as software and information
technologies in a loosely defined set of ‘creative industries’, made
coherent by – of all things – the opportunities to exploit intellectual
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property (Garnham, 2005; O’Connor, 2007; Galloway and Dunlop,

2008). Less attention has been given to the choice of industries as an
analytical category, possibly because reference to a set of industries
provides its own set of policy markers, as well as allowing for the loose
alignment of arts and media industries that has long been an aim of
this discursive construction of the field. Recent work by Potts et. al.
(2008) and Hartley (2009) has begun to rethink this focus upon
industries as a starting point, as it derives from Standard Industrial
Classifications that have always worked poorly for sectors outside of
agriculture, mining and manufacturing, it claims a coherence to a set
of outputs on the basis of their inputs that does not stand up to close
scrutiny, and it can function too easily as an “insider” discourse
promoting collusion between industry representatives and policy
departments, as has happened historically in both the arts and media
industries (see e.g. Streeter, 1995). Recent work has proposed an
alternative definition based upon social network markets (Potts et. al.,
2008). I’ll return to this below, but two points which can be made about
this are that it avoids privileging producer interests over those of
consumers, and it has been developed through a dialogue between
cultural studies and evolutionary economics.

Observations on Economics

From the point of view of virtually all of the humanities, and most of
the social sciences, the first striking feature of economics as a
discipline is how abstruse and mathematical its dominant mode of
argumentation seems to be. There seems little doubt that economics
was the branch of social theory where the aspiration to scientificity
was most openly embraced, and where claims towards greater
precision of knowledge arising from its mathematical representation
have been made most ardently. In Foundations of Economic Analysis,
published in 1947, MIT Professor Paul Samuelson proclaimed that
“mathematics is a language”, and mathematical language became a
sine qua non of economics, tending to define who progressed in the
discipline and who quietly disappeared. As David Warsh (2006) notes,
this has tended to mean that a variety of important and suggestive
topics, from moral philosophy to comparative histories of capitalism to
the theory of monopolistic competition to the nature of power and its
relevance to markets, have either tended to be shunted out of the
economics mainstream or translated into mathematical formulae such
as game theory that come to strip away much that was originally
interesting about the concept. While this has tended to shunt out more
critical views towards the capitalist economy, particularly when neo-
classical economics was combined with positivist philosophy (see e.g.
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Lipsey, 2008), it has also sidelined significant non-mathematically-

based defences of capitalism, most notably Joseph Schumpeter’s
theory of creative destruction as the underlying dynamic of capitalism,
and the catalytic relationship he foresaw between markets, innovation
and entrepreneurship (Schumpeter, 1942).

Another feature of economics as a discipline that can appear unusual

from the perspective of cultural studies is the existence of openly
partisan conservative economists, and the assumption that a plurality
of intellectual positions can co-exist which align to political positions
across the left-right continuum. This does sit unusually with the claim
that one can undertake “value free” economics where the technical
apparatus of analysis and explanation is deemed to be able to operate
separately from the ethics and values of those applying it. To take one
apparent example, the debates between Keynesians and Monetarists
about the most appropriate tools for macroeconomic management are
infused with differing positions about unemployment and government
debt, that are recognisably in a continuum of arguments between
social democrats and liberals on the one hand, and conservatives on
the other. One avenue through which these competing tendencies are
expressed is, somewhat curiously, the undergraduate textbook.
Avowed Republicans such as Greg Mankiw and liberal democrats such
as Paul Krugman produce undergraduate economic textbooks in order
to shape the wider debate; interestingly, economists have also proved
to be enthusiastic bloggers, with conservatives such as Mankiw and
Gary Becker and liberals such as Krugman and Brad De Long being
engaged bloggers. 2 Economists have also used television programs as
a way of popularising their arguments, as seen with John Kenneth
Galbraith’s The Age of Uncertainty, produced by the BBC in 1977, and
Milton and Rose Friedman’s Free to Choose, produced by the U.S. PBS
in 1980.

What does stand out about economics, from the perspective of other disciplines, is

how much access economists seem to have to public policy making. The first

wave of objections to what we would today term “neo-liberalism”, which came in

the guise of the critique of “economic rationalism” led by sociologist Michael

Pusey (Pusey, 1991), were about the general influence of economists over public

policy, as much as they were about types of economics and their relationship to

types of policy. Pusey argued that ‘the state apparatus is caught within projections
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of reality that give primacy to “the economy”’, so that ‘the tail that is the

economy wags the dog that is society’ (Pusey 1991: 10). The problem with the

critique of economic rationalism in its first incarnation was that it required an a

priori demand that protagonists are for or against markets, or for or against

government intervention in a generic sense, assuming that the concern for social

management and the development of economy in the practice of government have

developed as alternative policy principles; Pusey counters economic rationalism

to a bipartisan post-WWII concern for nation-building. There is, however,

considerable historical evidence that, in practice, the ethical-normative and the

calculative-technical dimensions of policy have typically been developed in

tandem, as part of what Foucault refers to a “liberal” arts of government (Miller

and Rose, 1990). Not surprisingly, then, we tend to find that government policies

today typically combine a normative dimension with a practical and technical

dimension that has been about constructing or problematising a social domain in

order to render it governable and amenable to change through the application of

policy, and that economics is one of the techniques which emerges through that

practice of “problem finding” as well as problem solving in public policy.

The correlate of this is that seemingly small differences among

economists often have quite large policy implications. There are many
examples of this, ranging from debates about the efficiency of
information flows in financial markets, the role of altruism in economic
behaviour, and the current interest in the multiplier effects of
macroeconomic stimulus packages, but one consequence is that the
political implications of a methodology are often less overt than is the
case in disciplines such as cultural studies, where the a priori
expectation of engagement with a particular political project have
always been much stronger. It would be beyond the scope of this paper
to develop this proposition in detail, but two points can be noted. First,
there are a significant number of recent winners of the Nobel Prize in
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Economics whose work would have to be seen as questioning claims

about rational expectations and efficient market hypotheses – George
Akerlof, Paul Krugman, Amartya Sen and Joseph Stiglitz would be
among the more obvious examples. Second, even as such avowedly
establishment entities such as the American Economic Association
proclaim that they take “no partisan attitude, nor does it commit its
members to any position on practical economic questions”, they have
been criticized by those who have drawn upon political fundraising
data to identify a preponderance of Democratic Party supports among
the U.S. membership over Republican Party supporters (McEachern,
2006).

Economics as seen from Critical Cultural Studies

It is notable in considering critical literature from media and cultural

studies that it tends to work with a quite limited conception of what
constitutes economics. Hesmondhalgh (2007: 30) defined economics
as being neo-classical economics, which ‘is not concerned with
determining human needs and rights, nor with intervening in questions
of social justice’, but rather with ‘how human wants might be most
efficiently satisfied’, and which ‘equates the well-being of people with
their ability to maximize their satisfactions’. Miller et. al. (2001) refer to
the ‘neo-classical vision of Hollywood’ as ‘bourgeois economics’ which:

asserts that the supposedly neutral mechanism of market competition exchanges

materials at costs that ensure the most efficient people are producing, and their

customers are content. This model may occasionally describe life in some fruit

and vegetable markets today. But as a historical account, it is of no value: the

rhythms of supply and demand, operating unfettered by states, religions, unions,

superstition and fashion, have never existed as such (Miller et. al., 2001: 48).

The dominant view of economics from the perspective of critical

cultural studies is of a discipline with a singular dominant set of
priorities, which are narrowly focused and lack realism. The next step,
which emerges with the critique of neo-liberalism, is to argue that such
economics effectively functions as an ideology, serving dominant
economic interests through the mystification of social reality.
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The concern is that such authors are engaging with a straw figure,
drawing upon the textbook representation of undergraduate economics
as a stand-in for the economic discipline as a whole. To take one
example, Hesmondhalgh identifies the work of Harvard economist
Richard Caves (2000) as an instance where ‘even economic analysis
that recognizes the specificity of media and culture, and some of the
limitations of traditional economic analysis, tends to downplay the
severity of the problems of cultural markets’ (Hesmondhalgh, 2007:
31). Caves’ work marked an attempt to broaden the remit of economic
analysis beyond the economics of the arts, using the creative
industries rubric to analyse those activities associated with the supply
of goods and services with cultural, artistic or entertainment value.
Caves used such tools as industrial organisation theory, theories of
transactions costs and information economics to understand, among
other things, the relationship between contracts and institutional
relationships as alternative means of managing uncertainty in
industries characterised by high up-front costs, considerable demand
uncertainty, and the resulting need to manage risk. It is not clear to me
that such work downplays endemic uncertainty and its associated
problems for both creative workers and firms in creative industries,
although it uses a language associated with complexity theory rather
than fundamental contradiction, which is more characteristic of the
Marxist political economy tradition.

Part of the issue about the alleged ideological biases of economics in

fact concerns differences in methodology. It is not necessarily that
different methodologies lead to fundamentally different conclusions.
There are certainly pathways from mainstream economic theory, as
much as there are from political economy or cultural studies, through
which a case could be made for the value of public service media, for
example. The risk is that economics has been defined in advance as a
primarily ideological project, and its claims to be anything other than
ideologically motivated are treated as the mystifications typical of a
defence of bourgeois class power. As this approach to the sociology of
knowledge has been questioned from so many angles in critical social
theory over the last three decades, it is surprising to me that it has
been so readily accepted in the critiques of neo-liberalism, and the
association of economics tout court with this exnominated ideological
project.

Neo-Liberalism
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There has been a concern that cultural studies has become overly
influenced by economic arguments and discourses, and in Australia
this often makes reference to the rise of creative industries as a policy-
oriented academic discourse. At the core of the critical theorists’
dissent with creative industries is the claim that it promotes neo-
liberalism as a political ideology, and with that furthers the hegemony
of multinational corporate capital over the cultural sphere. Miller finds
that ‘neoliberal creative industries discourse’ has been promoted by
‘carpet-bagging consultants’ pushing a ‘cybertarian mythology’, while
‘the cultural industries remain under the control of media
conglomerates’ (Miller, 2009a: 188, 190, 194). He argues that it has
been taken up in an ever-more frenzied search for relevance by those
who have found cultural policy studies to be too dirigisme and statist,
and counterposes the concerns of cultural studies with critical
multiculturalism and the rights of the dispossessed with creative
industries, which has at its core ‘the hypocrisy of neo-liberalism’
(Miller, 2009b: 270,274). Des Friedman views the rise of creative
industries discourse in the United Kingdom as part of a larger project of
‘the neo-liberalization of media policy’ which ‘is designed to transform
the existing balance of power … to assist the expansion of private
accumulation and to undermine the legitimacy and existence of non-
profit and public service media provision’ (Freedman 2008: 224).
Echoing earlier critiques by McQuire (2001) and Rossiter (2006),
Hesmondhalgh (2007) argues that creative industries as an academic
discourse has been overly complicit with “Third Way” ideologies that
promote marketisation and the commodification of culture under the
guise of neo-liberalism, while O’Connor expresses similar concerns
about ‘the uncritical annexation of the creative industries to the
innovation system of the knowledge economy’ (O’Connor, 2009:
forthcoming).

So what is this neo-liberalism? The term has a shorter history than

many would imagine, although the ways of thinking, conceptual
frameworks and policy prescriptions that it refers to have a longer
history, variously being referred to as monetarism, Thatcherism,
Chicago School economics, the economics of the New Right, economic
rationalism, and the “Washington Consensus” as critiqued by Stiglitz
(2001). There are two strands of thought that are brought together
around the concept of neo-liberalism, with one derived from neo-
Marxist arguments as developed by Harvey (2005) and Scholte (2005),
among others, and a second strand which is derived from the later
works of Michel Foucault on governmentality.

The neo-Marxist account is the most straightforward to explain. Harvey

(2005) Harvey defined neo-liberalism as ‘[a] theory of political
economic practices that proposes that human well being can best be
 17

advanced by liberating individual entrepreneurial freedoms and skills

within an institutional framework characterized by strong private
property rights, free markets, and free trade’ (Harvey, 2005: 2). He
proposes that it emerged in the 1970s as a conscious ideological
strategy to reassert the class power of business and economic elites, in
the face of declining belief in neo-Keynesianism and the policy
consensus of post-WWII liberalism, and challenges to power and
authority on the domestic and international fronts. It points to the
relationship between influential think-tanks and the ideas and policies
that shaped the Thatcher and Major governments in Britain from 1979
to 1997, and the Reagan administration in the United States in the
1980s. Harvey argues that neo-liberalism has dominated the policy
landscape since the late 1970s, displacing earlier ideas associated with
Keynesian economic and social democracy, and that its influence was
extended globally during the 1980s and 1990s. Scholte (2005)
explicitly links globalization and neo-liberalism, arguing that:

From a neoliberal perspective, globalization is an economically driven process

that should proceed on first principles of private property and uninhibited market

forces. Regulation should have as its primary—if not sole—function to facilitate

and protect private ownership and the “free” operation of supply and demand

among producers and consumers. Other economic rules and institutions are

“political interferences” that undermine market efficiency and should therefore be

reduced to a minimum. With a combination of privatization, liberalization and

deregulation, globalization should bring maximum prosperity, liberty, democracy

and peace to the whole of humankind (Scholte, 2005: 1).

Foucault’s account of the emergence of neo-liberalism is quite different

to the neo-Marxist one. In his lectures at the College de France in 1978-
79, Foucault does not trace the origins of neo-liberal thinking about
government to the 1970s, but to the late 18th century, noting that the
question of ‘frugal government’ has its origins in this period. He also
does not present the question as one of an opposition between the
state and the market, but rather observes the paradox that the ‘epoch
of frugal government’ is accompanied by ‘the extensive and intensive
development of government practice that … has been constantly
accompanied, outside and within government, by the question of the
 18

too much and the too little’ (Foucault, 2008: 28). He emphasizes the
need to historicize different forms of government, arguing both that ‘an
essential Capitalism … with its logic, contradictions, and impasses does
not exist’ (Foucault, 2008: 174), and that neo-liberalism is ‘not Adam
Smith … not market society … [and] is not the Gulag on the insidious
scale of capitalism’ (Foucault, 2008: 131). I would extend this point to
say that, for Foucault, neo-liberalism is not simply a doctrine that has
‘understood people simply through the precepts of selfishness’, as
Miller (2009: 271) interprets Foucault as arguing.

Foucault locates neo-liberalism in a general problematic of identifying

what is “too much government”, and argues that in the modern world,
or at least the world since the 19th century, ‘a series of governmental
rationalities overlap, lean on each other, challenge each other, and
struggle with each other: art of government according to truth, art of
government according to the rationality of the sovereign state, and art
of government according to the rationality of the economic agents, and
more generally, according to the rationality of the governed
themselves’ (Foucault, 2008: 313). Rather than seeing ‘arts of
government’ as an evacuation of the political sphere, or in Pusey’s
terms society being subordinated to the economy, Foucault argues that
‘it is here that politics is born’ (Foucault, 2008: 313).

Foucault specifically focuses on German neo-liberalism as it emerges in

the aftermath of the Second World War, and American neo-liberalism
as it is developed through the Chicago School of political economy and
through theories of human capital. Of these, it is the American
formulation which is the more radical and the more recognizable in the
critiques of neo-liberalism, proposing the generalization of the form of
the market, and particularly the application of market precepts to non-
economic domains. The German case of the Ordoliberals is more
complex, as they took as their starting point the rise of Nazism, and
the question of how to avoid the return to a totally planned economy
and society in Germany, which they saw as having roots in more
longstanding protectionist and statist impulses in 19th century German
political and economic thought. The resulting concept of the “social
market economy”, while explicitly developed as an alternative to state
socialism, is not neo-liberalism as understood in the Chicago School
approach. It envisages prices being set primarily through markets, but
also a role for governments in promoting competition and restricting
monopolies and unfair trading. It does point towards generalization of
the enterprise form to the point where individuals can be seen as
entrepreneurs of their own lives, but is also points towards
comprehensive social insurance, as well as forms of collective
consumption and the provision of social goods. It insists strongly upon
the rule of law as a counterpoint to extending the realms of economic
 19

planning, but does so with a view to the state being otherwise actively
engaged in other forms of planning, such as urban planning or the
development of infrastructure.

One thing that Foucault is very clear upon is that there is no such thing
as capitalism in the singular and that capitalism can only be
understood through empirically grounded economic and institutional
histories. It is often observed that social democracy has never
developed a foothold in the United States, but it is also the case that
countries such as Germany or France have not really had anything akin
to the “Reagan revolution” and the associated retreat from the
regulatory state. Why do I focus upon this? One point is that there is
today a very clear example of a state where the influence of neo-
liberalism is minimal, and which is nonetheless moving quickly towards
being one of the most influential states on the globe. That state is of
course China. Contrary to Harvey’s assertion that China since the rise
of Deng Xiaoping has exhibited “neo-liberalism with Chinese
characteristics”, Nonini (2008) argues that the depth of official
commitment to private property rights, free markets and free trade – to
take three baseline commitments of neo-liberalism – is limited,
contingent and reversible, particularly if enhancement of any of these
was to challenge the power of the Chinese communist party-state.
Moreover, he argues that popular support for a neo-liberal policy
program in China is virtually non-existent, reflecting the historically
weak position of liberalism as a political philosophy in Chinese society,
and that while there may be some support for a “weak” variant of neo-
liberalism based around support for markets, entrepreneurship and
consumerist values, ‘the strong version of neo-liberalism does not exist
in China as a hegemonic project’ (Nonini, 2008: 168). In tracing
whether the rise of suzhi (quality) discourse in China can be seen as a
proxy for popular thinking in neo-liberal terms, Kipnis has argued that
‘to naïvely draw upon all types of analyses of neo-liberalism without
noting their contradictions leads to a hodgepodge sort of analysis in
which the world as a whole and everything in it appears to belong to a
single theoretical category’ (Kipnis, 2007: 387).

It could be argued that China is an exception, although if so, it is a big

one, and one that is growing. In his debate with Will Hutton about
whether China can sustain economic growth without adopting what he
terms the “Enlightenment trilogy” of individualism, liberty and
pluralism, economist Meghnad Desai makes the point that ‘capitalism
… has accommodated a variety of institutional arrangements and only
in the most recent phase of globalization have we thought that an
Anglo-Saxon style liberal democracy is its sine qua non’ (Hutton and
Desai, 2007). The ability to accommodate Leninism with capitalism is
historically unique, but the experience of the Asian “developmental
 20

states” makes it clear that capitalism can co-exist with a diverse range
of institutional forms and modes of intellectual justification.
Cunningham (2008) has made a similar point about creative industries
outside of the British case, where it has a diverse range of policy and
institutional inflections and is not simply the local adaptation of a “Cool
Britannia” template, complete with Prime Ministers posing with the
brothers Gallagher. Kong et. al. (2005) have also undertaken detailed
work on why creative industries policy discourse has found receptive
environments in some Asian contexts (Singapore, Hong Kong SAR and,
in a more complicated way, China), but not in others, such as Japan or
India.

More generally, there is the danger that neo-liberalism may become a

junk term, akin to the junk bonds and toxic assets that almost brought
down the global financial infrastructure of capitalism in late 2008.
Observing the ballooning number of references to neo-liberalism found
in the field of anthropology in the 2000s, Nonini expresses the concern
that:

The term ‘neo-liberal’ has recently appeared so frequently, and been applied with

such abandon, that it risks being used to refer to almost any political, economic,

social or cultural process associated with contemporary capitalism … A term with

so many meanings obviously has great utility, because most progressive scholars

can agree that whatever neo-liberalism is, they don’t like it, and the ambiguity of

the term allows discursive coalitions of the like-minded to form without the

troublesome bother of having to clarify exactly what it is they oppose or are

critical of (Nonini, 2008: 149).

There is the more general risk that universalizing claims about neo-
liberalism may in fact rest upon a kind of Marxist functionalism,
whereby an all-encompassing dominant ideology is developed to
“serve” capital in its latest phase, which is deemed to be global and
flexible. Nonini proposes downsizing our claims about neo-liberalism
and giving them historical, geographical and cultural specificity.
Otherwise, the real risk exists of ‘assuming that flexible capitalism
brings about the very political conditions within nation-states of
deregulation and privatisation etc., which it needs for maximum capital
accumulation, and … that flexible “capital” has a universal global
 21

capacity to do so, and that to do so is somehow “neo-liberal”

governance, restructuring, domination etc., wherever it occurs in the
world’ (Nonini, 2008: 151).

Where Economics May Help Cultural Analysis

The growing literature on cultural economy, I have argued, faces a

significant limitation in that, with some exceptions, it has avoided
direct engagement with economics and economists. While this
emerges in some ways from limits of economics in dealing with culture
and intangibles generally, some of this impulse also arises from a
perception that economics as a whole is based around the limited
picture that emerges from undergraduate textbooks associating the
“science of economics” with the allocation of resources between
unlimited wants and scarce means. Actual empirical work on cultural
economy suggests that the gap between economics and cultural
studies may not be as great as is sometime assumed, particularly if it
is acknowledged that the language of complexity and uncertainty may
be used by economists whereas cultural theorists use concepts such as
conflict and contradiction to refer to similar phenomena. My own view
would be that interdisciplinary and collaborative work between
economists and cultural theorists offers a considerably more fruitful
path to better understanding cultural economy that the alternative
proposed, for example, by Larry Grossberg of cultural studies’ theorists
aiming to ‘do economics better than the economists’ (Grossberg, 2006:
21).

One major obstacle to such collaborative work, however, is the way in

which neo-liberalism has been constructed as an all-purpose bogey
man, and economists are represented as the ideological handmaidens
of this avowedly pro-corporate mode of policy-related academic
discourse. I have indicated in this paper that the neo-Marxist version of
this argument radically understates the degree of policy diversity and
institutional forms of capitalism that we see worldwide, and mistakenly
attributes a right-wing leaning to the economics discipline rather than
intellectual pluralism, but that it rests upon a view of policy as the
unmediated reflection of the ideological interests of the most
economically powerful players. It has licensed the use of “neo-liberal”
as a seemingly limitless “scare word” that can be used to denounce
anything that the speaker chooses to disagree with, in a line of
apparent solidarity with anyone deemed to be notionally progressive,
against anyone deemed to be presenting “reactionary” or “bourgeois”
thought. The term has some quite distinct genealogies, with the work
 22

of Michel Foucault pointing to a complex set of mediations on

questions of “setting limits to government” that have been
preoccupations within societies governed on liberal principles for over
two centuries, whose institutional manifestations are many and varied.
It would be by going further down this path, rather than using the term
“neo-liberalism” where once there may have been reference to
“bourgeois ideology”, that will be more fruitful in understanding where
economics as a discipline ahs historically been able to insert itself into
policy processes, and the contributions and limitations of such
interventions.

I will conclude by identifying four areas where there I can identify

scope for useful collaboration around the concept of cultural economy
between economic and cultural researchers. The first concerns the
value of information. Because markets are, by one account, a vast
signaling mechanism to various agents that inform decisions,
economists have done a lot of thinking about information – who has it,
how it is distributed, how it is produced, and how it is used (e.g.
Shapiro and Varian, 1999). The growth of the Internet and the rise of
the digital economy has meant an exponential growth in amounts of
available information and capacities to access them, leading to a
proliferation of forms of information-driven behaviour, such as online
auctions on eBay and other related sites (David and Fopray, 2002). The
question of the value of information is also emerging sharply in the
present period in debates about the future of news, and plans by
commercial media proprietors to shift to user-pays forms of access to
their online news sites. It also arises in considering the contemporary
roles and purposes of the university, but noting this draws our
attention to the important distinctions between information and
knowledge, which cannot be resolved within an economic framework
that takes as its starting point undifferentiated data. More in-depth and
interdisciplinary work on the value of information is emerging as a
priority.

Second, I would note discussions about the value of networks.

Networks are one of the three primary forms of co-ordination of
behaviour among agents alongside hierarchies and markets, and there
is a general view that their significance has increased over the 1990s
and 2000s for reasons related to the rise of the Internet and digital
media technologies (Castells, 1996; Thompson, 2003; Benkler, 2006).
Social network analysis has its origins in sociology, but it constitutes a
major potential field for collaborative research related to the cultural
economy. One recent example of such work is by Potts et. al. (2008)
which has brought together cultural studies with evolutionary and
behavioural economics to propose a redefinition of creative industries
around the concept of social network markets. This work aims to avoid
 23

the problems associated with industry-driven definitions of the creative

industries, such as boundary dilemmas and the implicit privileging of
producer interests over those of consumers, by identifiying the creative
industries as a field characterised by recurring interactions between
learning agents, social networks and market-based enterprises,
organisations and coordinating institutions. This presents the creative
industries as being engaged in ‘the representation and coordination of
new ideas’ (Potts et. al., 2008: 176) whose definitional boundaries can
be expected to shift over time as a result of interactions between
learning agents and enterprises in social network markets.

A third area of interest is that of motivations for participation and

collaboration in online social networks. Economics has long been taken
to task for routinely underestimating and downplaying the significance
of non-market activities and those undertaken with non-pecuniary
motivations. It is now being argued, most notably by Benkler (2006)
that an information-driven economy with digital technologies at its core
places a premium upon non-market activities with non-pecuniary
motivations, as it values a non-proprietorial approach to information as
a metapublic good, with many implications for intellectual property,
labour markets, the formation and maintenance of networks etc. This
debate has been picked up on by Australian economists John Quiggan
and Jason Potts in what can bet termed the altruism/signaling debate
(Quiggan and Potts, 2008). Quiggan follows Benkler in arguing that the
Internet and innovation through it is fundamentally driven by non-
market activities with non-commercial motivations (altruism), that this
has been the Internet’s history and its future, and that this has wider
ramifications for the wider economy and for economics. Potts counters
with the proposition that much non-pecuniary online behaviour can be
seen as proto-market rather than non-market in its motivations, as it
involves a range of signaling behaviours that may have economic pay-
offs over a longer-term time horizon. As we are often talking here
about publicly viewable online activities, such as Facebook profiling
and personal blogging, these are activities that clearly concern
representation as well as information, and should be amenable to
cultural economy analytical frameworks.

Finally, there is the relationship of culture to the wider economy, and

the particular question of what happens to cultural activities and
creative industries in periods of economic downturn and recession. It
has been a common observation that the art boom in countries such as
Britain co-evolved with what proved to be an unsustainable
hyperinflation of financial assets and bonus cultures in the City of
London, rewading, as Alice O’Keefe argued in her last arts column in
the New Statesman, to a ‘contemporary visual art scene [that] has
been the most slavishly money-serving, catering as it has done
 24

exclusively to the rich’ (O’Keefe, 2009). For O’Keefe, this was

encouraged by New Labour with its promotion of the creative
industries as a growth segment of British industry:

I remember, in March 2007, going to see Tony Blair make a speech on the arts at

Tate Modern, in which he boldly claimed to have presided over a cultural "golden

age". The arts, he told the gathered great and good, were a vital component of

Britain's continued economic success: "A nation that cares about art will not just

be a better nation. In the early 21st century, it will be a more successful one.” In

new Labour parlance, the arts had become the "creative industries". Like bankers

and stockbrokers, artists were expected to prop up the wobbly edifice of consumer

capitalism, to generate profit, attract tourists, help Britain market itself as a

cultural - and therefore financial - "hub". Placing culture firmly at the service of

finance had its advantages for the arts administrators in the audience, too, as it

gave them a clear claim on their slice of the government pie (O’Keefe, 2009).

If this has been the case, then one would expect much of the arts and the creative

industries to sink into recessionary gloom alongside the financial sector that promoted

their unsustainable growth. At its base, this is a claim that these are not “real industries”,

and that culture remains a residual outcome of developments in the “real” economy. But

Andy Pratt, in a recent review of possible developments (Pratt, 2009), proposes that this

is only one of four possibilities for cultural sectors in a recession. Another possibility is

that the public sector picks up much of the slack arising from a private sector downturn,

and that cultural activities flourish, albeit with quite different and most likely more

socially oriented priorities. A third possibility is that we are in a phase of creative

destruction, as Joseph Schumpeter referred to business cycles under capitalism, and that
 25

there will be “green shoots” of new forms of culture driven by new ideas and

possibilities, as others wither as they prove to be unsustainable. The final possibility that

Pratt raises is that as many economists and policy makers have not only failed to

adequately register the rise and growth of the creative industries, but have failed to

understand their changing relationship to economy and society. The resilience of the

cultural sectors, in this account, arises from a wider shift in the relationship between

symbolic and material production, so that:

The ways in which economic transactions include, or depend upon, the cultural

dimension of their activities to not only ‘add value’; but to encourage consumers

to make the ‘buy/not buy’ decision. So, ‘culture’ is not simply an added extra, or

candy floss, it is the main action, and as such cannot be removed from the product

easily (Pratt, 2009: 496).

Such questions are very much the stuff of cultural economy research.
My argument today is that we are going to need to draw upon at least
some economic analysis to begin to answer them.
1How the Internet was defined as being “like print” in the U.S. (striking down of Communciations
Decency Act in 1996), and “like television” in Australia (extension of Broadcasting Services Act to
online content).
2John Quiggan in Australian context.